DEFECTS LIABILITY REGULATIONS

On 8th April 2020 the Cabinet Secretary Ministry of Transport, Infrastructure, Housing, Urban Development and Public Works gazetted the National Construction Authority (Defects Liability) Regulations, 2020 (the “Regulations”) to regulate defects liability in construction contracts. The Regulations are not yet in force and will only come into effect if approved by parliament.

Should the Regulations be effected, parties will no longer enjoy the current contractual freedom in relation to defects liability periods but every construction contract will have to comply with the mandatory requirements specified in the Regulations in connection with both patent and latent defects.

Overall, the Regulations have been received with scepticism and apprehension by the construction sector. Stakeholders are concerned that the Regulations may do more harm to a market that has seen significant slowdown in the recent past and is currently reeling from the effects of the Covid-19 pandemic. We however understand that the National Construction Authority has taken these sentiments on board and has embarked on a process of public consultation in a bid to reviewing the Regulations.

This alert will highlight some of the key proposals in the current draft of the Regulations noting that there are likely to be significant changes if the Regulations are amended following the public participation exercise. Read more